Municipal tax hike to be held to 4 cents by using surplus
Mayor presents budget
to council, saying tax rate could have risen higher
EAST BRUNSWICK — A municipal budget presented Monday for 2002 would raise the municipal tax rate by 4 cents per $100 of assessed valuation if adopted.
Mayor William Neary delivered his annual budget address at Monday night’s Township Council meeting.
The proposed increase means the owner of property assessed at $100,000 will pay about $40 more per year in municipal taxes.
"With the economic realities in 2002, this increase of $3.33 per month is a remarkable accomplishment for all of those involved in the process," Neary said.
Township residents are also facing a proposed school tax increase for the 2002-03 school year of about 35 cents, which would add about $350 to the school tax bill for the owner of property assessed at $100,000.
The total municipal budget for 2002 stands at approximately $47.8 million — up about $1.9 million from last year.
State aid levels stayed the same for the township as a result of the state budget deficit being addressed by Gov. James E. McGreevey.
The township will receive about $5.7 million in aid this year, about the same as in 2001, the mayor said. It accounts for approximately 12 percent of the budget.
"Considering the conditions in Trenton, I congratulate Gov. McGreevey for his efforts not to reduce our municipal state aid," he said.
The tax increase would have been higher if the township did not dig into its fund balance or surplus account and apply those funds to offset taxes. The tax hike would have been 9.45 cents per $100 of assessed valuation if the township did not take $4.8 million from its fund balance, which is now down to $1.2 million.
"Why should we require our residents to pay higher taxes when we have more of their money sitting in the bank?" Neary asked. "I do not believe that this action will result in a dangerous financial position for emergencies, or lower our bond ratings. These are unusual times, and they call for unusual measures."
Neary noted the township’s success in keeping tax increases low over the past five years. Over that time, the municipal rate has risen by only 4 cents — the same increase as proposed for the coming year.
"We are way behind inflationary increases in six years in our tax levy," he said. "No one wants to raise taxes, but the alternatives are less desirable."
Neary said the township’s operating expenses are up by only $580 this year. The challenges the township faced were that its insurance costs rose by almost $1.2 million and, due to the reduction in interest rates, its investment income is projected to decrease by about $700,000.
"These costs alone result in the need for a 9.45-cent increase," he said.
"We need only look at the interest returns of our township accounts to know how this downturn in the economy is being felt," he said, adding that the loss of the $700,000 amounts to 3.5 cents on the tax rate.
He attributed the increased medical insurance payments to Sept. 11.
The tax levy for this year’s budget is $18,161,585, which is up by about $800,000 from last year.
In East Brunswick, the municipal budget accounts for about 18 percent of a homeowner’s total property tax bill. The school budget makes up about 64 percent, while county taxes are 14 percent, fire district tax is 2.5 percent, and open space initiatives are less than 1 percent, he said.
Neary said he used to assume tax increases could be averted by reducing costs and "waste."
"But we have reduced waste, we have consolidated and eliminated several high-salaried positions, and we eliminated duplicate programs in the past five years, and we have reduced costs at every level," he said. "Unfortunately, however, due to circumstances beyond our control, we have to face the economic realities of 2002, and balance that with its impact on our residents."
The Township Council will review the municipal budget proposed by Neary, and a public hearing will be scheduled prior to its adoption.